Tourists
like authentic English or Irish pubs, so why not take the pubs where
the tourists come from? How about opening an English pub in France?
Ship all the interior decoration from England, put English beers on
the tap, and serve English pub food - how difficult can that be?

The
challenge is that the authentic atmosphere comes with the people - not
with the 'hardware'. So, to create an authentic atmosphere you have to
make the customers behave as if they are English, which is more of a
challenge. Ordering at the bar? Standing up while drinking? Ordering a
round for your mates? Eating jacket potatoes? Drinking beer rather
than wine - and using pint glasses rather than smaller one? The
average French customer would expect to sit down, wait to be served,
and have a considerable choice of foods? The FT reports today the
story of an English chain of pubs that succeeded in creating that
authentic atmosphere, in part by becoming the local watering hole for
expats, but also actively 'educating' the customer.

This
little anecdote illustrates an interesting international business
challenge for many businesses in culture-related industries: How to
create an authentic experience where the participation of the customer
contributes to the experience? And, how authentic should it really be?
How American should Disneyland Paris be - and how American can it be
if the audience doesn't behave like Americans?

Many say
they would like authentic Indian or Chinese food in British
restaurants - but do you really? Most of my Indian or Chinese friends
don't like to go the local Indian or Chinese restaurant because it
isn't the real thing, but the English like the adapted version. To be
truly authentic, you would need to educate your customers - which some
may like, and other don't. London China town shows a variety of
degrees of adaptation, and flexibility. What restaurants experience on
small scale, is equally a big challenge for culture industries like
movies, shows, tour operators, hotels, etc.

The
tourism research literature has explored the issue of communicating
culture to foreign visitors (a few references are below), but to my
knowledge that research has not been connected to the international
business and strategy literature.

Shouldn't
Christmas be a good time to think a bit deeper, philosophically about
our times? Here is a nice challenge to think about - or to debate:
Imagine Socrates would come to America today, what would he be saying
and doing?

The
Economist debates the question in its Christmas issue, opining that
"Socrates would witness a vibrant and proud democracy, and disdain it
as indulgence of the benighted, unphilosophical "herd". He would
interrogate America's politicians, talk-radio and cable-television
pundits in search of honest discussion, and thereby exposing their
confusion, contradictions and ignorance...". It is an interesting
piece, but to complex to summarize here. Thus, I recommend that you
read for yourself - or even better, debate!

My
favorite picture of the year, I have taken outside a car dealership in
Reading. Unsuspecting passers by might think they could now get rid of
their government - and that option would certainly have appealed to
many at the time. However, what was on offer was a subsidy from the
government if you scrap your car, a scheme meant to kick-start the
economy (and a rare case of the UK government copying a German policy
that it previously criticized as ineffective).

In its
Christmas issue, The Economist summarizes the Great Depression
that never was in the leader "The Great Stabilization". It is easy to
forget how worried we were a year ago about the state of the global
economy. The Economist's leader makes few points worth
remembering for the policy debates of the coming year(s), which are
likely to be lively:

Most
importantly, "2009 was extraordinary not just for how output fell, but
for how a catastrophe was averted" ... " That outcome was not
inevitable. It was the result of the biggest, broadest and fastest
government response in history." It is important to remember that,
because we are seeing opposition parties the world over lambasting
those who were carrying responsibility in the dark winter 2008/9 for
spending to much government money, piling up national debt. Certainly,
mistakes were made, and some of the money could have been spend wiser.
But, it could have been a lot worse.

However,
there are many challenges ahead, as the the world economy is far from
recovery, and the fall-out of this recession and the government
bail-outs have to be paid for. Challenges are many:

The
imbalance of international trade with a huge deficit of the US and a
corresponding surplus in China.

The big
debt accumulated by some government, most infamously Greece.

The
bubble that may be in many stock markets due to the expansionary
monetary policy.

The
inflationary potential arising from the recent monetary policy, unless
excess liquidity is withdrawn by Central Banks without delays.

The
uncertainty in the housing market, notably in places like Ireland,
Spain, the UK and the US - and with it depressed consumer spending.

The
uncertainty regarding the liquidity of some banks, and the need for
better regulation - yet where few agree what would be "better
regulation".

Distribution conflicts between companies and their workers, such as
those at British Airways.

The
budget cuts expected in many countries, and the associated pressures
on public services, and indirectly consumer spending and quality of
life.

Every
year this time of the year, I get cynic messages from around the world
about the British inability to handle a little bit of snow. It seems,
the rest of Europe is giggling in front their televisions watching,
yet again, England seemingly braking down after a slight bit of snow.
Sometimes, it is the airports, sometimes it is the roads, and usually
it includes the trains. This year, it is the Eurostar trains
connecting London to Paris that seem to be hardest hit - they are
closed down for the third day now, leaving tens of thousands of
passengers stranded, with no alternative modes of transport available.
What is going on?

In my
view, there are three fundamental problems facing British
infrastructure, whether privately owned or state owned:

An
underinvestment in infrastructure maintenanceand modernization.
Coming back from travels abroad, it is always sad to see how backward
and expensive any form of travel is in the UK - with very few
exceptions (Heathrow T5 is modern, and easyJet is cheap (but
unreliable)). The origins of this problems, in my view, go back to the
Thatcher years of the 1980s when the government slashed expenses on
anything in the state sector, and this investment gap has never been
recovered; privatization made little difference on this score.

A lack
of contingency planning. The relentless drive for efficiency of
operations reduces the slack in organizations - no more resources and
people sitting idle. Of course, if you have a bit of slack, you can
easier accommodate 'unexpected' adverse events - you pull all your
people together and solve the problem. This also requires thinking
ahead and be prepared for various forms of adverse events - from
signaling failure to snow storms - and train your people on what to do
if something happens.

A
demotivated workforce. The relentless drive for efficiency (in
part driven by the focus on shareholder value) often goes at the
expense of the workforce, who feel stretched and (in less skilled
jobs) underpaid. If you support your people when times are good, they
are also more willing to pull in extra effort in times of crises. If,
however, they feel (subjectively!) treated badly, they are less
willing to put in extra hours when crisis hits. This probably explains
why the staff of British Airways is even considering to go on strike
during the Christmas period.

What to
do about it? As an investor, I would stay away from companies
with dissatisfied customers - sooner or later these customers are
going to desert (as will the best employees). As a politician,
I would advocate better compensation for passengers who do not get the
service that they bought a ticket for. If companies have to pay
compensation (as train companies now have to in Germany), they have
incentives to put proper contingency planning in place! And it would
end the excuses that the snow was unexpected ...

In
fairness, I should add that the train that I am on right now is 'only'
10 minutes late... but two weeks ago, a journey on the same route took
me 3½ hours instead of 1 hour, without
snow, only "signaling failure".

Climate
change, and the current political processes aiming to introduce new
regulations is often see as a threat to businesses. However, El País,
which I was reading for breakfast (yes, I am in Spain today), takes a
different twist: "Green" is a big opportunity for business!

Many
businesses have been thinking about the implications of climate change
for a long time, and they have been developing new technologies - and
gradually these technologies have reached the stage where they can be
introduced to the market at prices that are not outrageously
expensive. New technologies help climate change in multiple ways:
improving the efficiency of energy use (for example, more fuel
efficient cars), efficiency improvements in energy generation (i.e.
changes in existing power plants), power generation from renewable
sources (e.g. and solar energy), bio-combustibles, nuclear, and carbon
capture (i.e. putting carbon created in power station underground).

El País
shows a figure suggesting that consumer demand based on more efficient
energy usage would stabilize carbon emissions by 2015; to get carbon
emissions down, new technologies of power generation are needed.
Business people are thus present in Copenhagen, demonstrating their
technologies, and the opportunities they see - from Vestas' windmills
to Renault's fuel-efficient car. And, presumably, they are lobbying
for new regulation to favour their particular technologies.

Another
interesting statistic from this article: Denmark is already earning
over 3% of its GDP from 'clean energy' - followed by Brazil, Germany
and Spain. I presume, export of windmills, solar power and associated
technologies account for a major part of this. This puts Denmark in a
strong position to 'square the circle' of cutting emissions while
keeping the economy buzzing.

The hotel
offers a neat service for its international customers: 1-page news
from their respective countries. It is interesting to read them across
and compare what is top news in different countries. Americans seems
most preoccupied with Tiger Woods, British are still arguing whether
they were right to invade Iraq alongside George W., and Germans are
arguing about their military operations in Afghanistan. I was also
curious to note that the item on Copenhagen had the same headline
across editions. However, the (identical) US/UK version talks almost
only about the violent protestors, the German version emphasizes more
the large numbers of peaceful demonstrators and some creative ideas
they used to get their point across.

Needless
to add that the sports news are mutually incomprehensible: "Cleveland
104, Portland 99" and "Stoke 2-2 Wigan" or "Bremen 0:2 Schalke" may
excite the fans in either country, but have little meaning for others.

A
good blog takes quite a bit of time. I guess that is obvious, if you
think about it. Since my main job is not blogging - or journalism -
that time often just isn't there. I have recently been working on a
new book on 'Global Business', and that is taking most of my time -
using up those time slots that I might otherwise use to think about
global business practice. So, I promise to continue but perhaps not
twice a week.

I also
realized that a lot of material we read in the newspapers about
business is a mix of wild speculation and the companies' own public
relations statements. What is really going on behind closed doors
remains confidential, and so it actually should be. But that makes it
difficult to evaluate what is going on. For example, I have been asked
many times what I think about GE and Opel (see June 6). Well, the
story took a very different turn than everyone expected. The only
thing I can say is that politicians are not good at negotiating with
businesses...

I want to
focus the blog on business matters rather than being drawn into
political matters - though there would be plenty to say about British
politics (and the supposedly independent media reporting about it).
Yet, that's really beyond what I can do here. However, there is one
issue that I feel strongly about and that I shall explore on the blog
in the next weeks, and that is "election systems". Even though we have
democracies all over the world, the actual process by which public
votes are translated into actual politics varies widely. In my view,
the supposed differences between 'nations' are in fact not
caused by, e.g., the French being different than the English, but by
the way voters can or cannot influence national politics. My favorite
example is the second Iraq war where public opinion across Western
Europe was fairly similar (small majority against), yet we saw a big
rift between the governments of Britain and Spain versus the
governments of Germany, France and various others. Watch this spot...

The
recession appears to be over the worst (keep your fingers crossed),
yet most people feel it in their every day life more now than a year
ago. The recession started with crashes in financial markets, yet they
seem to be on their way to recovery, and bonuses in 'the city' are on
the rise again.

In
contrast, unemployment is still rising. That is typical for a
recession - the impact in the financial markets is felt earlier than
the impact on labour markets. Financial markets anticipate the
developments of the near future, so share prices start rising when
expected profits rise - even if in the short-term things are getting
worse. This means that we really ought to turn our attention to labour
markets now.

The
Economist ran a good article explaining why the recession had
hugely varying effects on unemployment in different countries. The
essence is that in countries with highly flexible labour markets, such
as the US, companies are prone to quickly lay-off people when they
face declining demand. This then suppresses consumer spending, which
makes the recession worse (even the fear to loose a job can have that
effect).

These
effects are felt less in countries that make it more difficult to
lay-off staff, that provide support for companies keeping temporarily
not needed staff, or that pay generous unemployment benefits. In
consequence, Germany, Italy and the Netherlands have seen much less
increase in unemployment that Spain, the US and Britain. Moreover,
companies keep there often highly specialized people together rather
than loosing human capital for good. It is rare for The Economist
to point out the advantages of a less free market! However, as The
Economist is quick to add, when the good times return, countries
with more rigid labour markets will also find it more difficult to
reduce their unemployment again.

The U.K.
has experienced a peculiar debate on the relationship between
scientists and politicians in recent days. The trigger has been the
dismissal of the of an eminent scholar,
Prof David Nutt of Bristol University, by the home secretary
Alan Johnson
(no university education), from a supposedly independent advisory
council on drugs policy. His misdeed? He repeated his assessments
regarding appropriate classification of drugs, notably cannabis, in
various scholarly outlets: according to scientific evidence it is much
less dangerous than the government suggests, a view supported by many
other experts. Yet, the government is determined to class it as a
dangerous drug, and to send the police after all those growing or
distributing it.

Naturally, the government is free to form its own opinion. For
instance, they would want to take into account wider consideration
such as social implications rather than just medical impact. However,
where this case becomes unacceptable is when the minister denies or
discredits the scientific evidence presented. When he moreover
dismisses an advisor for not 'towing the party line', he makes a
mockery of the word 'independent'. Consequently, scientists across the
UK, usually not a very vocal group,
spoke out against their treatment by politicians in government and
opposition alike.

Scientific ethics requires to be truthful in reporting research
results! It is not acceptable to only report results that please
the authors' favorite theory, or the sponsors' preferred outcomes (a
common concern in medical research). Neither, is it acceptable to
depress findings that don't please the political elites of the day.

On the
other hand, if scientist become involved in politics, or otherwise
participate in an argument without this being grounded in scientific
evidence, they should be free to do so - but need to clarify the
difference. (this blog presents personal opinions that is not
necessarily grounded in my own research, though I try to provide
evidence where appropriate.)

This
story raises serious questions whether it is acceptable for scientists
to work with a government on independent advisory panels if their
membership is de facto conditional on towing the party line. It also
raises serious concerns regarding the independence of research that is
funded by government bodies on a project by project basis, and creates
de facto dependencies on political decision making. The implications
of this story